Many analysts agree that the in-building broadband market is ready to explode. A recent Cahners In-Stat report suggests that sales of broadband equipment and services to MTU (multiple tenant unit) buildings will rise from US$370 million in 2000 to $4.8 billion by 2004.
Accordingly, Cisco officials expect LRE to represent a significant new revenue stream for the company.
"Property and hospitality owners are now realizing that providing high-speed access and varied IP services -- video being one of them -- is really core to their business", Talukder said. He added that hotels and residential buildings have historically been bypassed for broadband wiring by CLECs (competitive local exchange carriers).
Cisco is targeting hotels, apartment buildings, and multitenant commercial buildings for its first wave of deployment. The company is also eyeing overseas markets, where broadband access is scarcer.
"It's a market that will have an upside," agreed Ron Westfall, senior analyst at research firm Current Analysis Inc.
Westfall also remarked that LRE is likely to be installed in smaller buildings, referring to a recent Department of Energy report that claimed that 95 percent of all structures in the United States are no more than three stories high. "This solution will be geared toward lower-end settings. The real growth in this market isn't the tall, shiny buildings in Manhattan, but the two-story buildings in Omaha," Westfall said.
Westfall also noted that Cisco's foray into in-building broadband signals a shift in the company's traditionally conservative strategy.
"Usually Cisco waits for a market to mature before they step in," Westfall said. "But here they're more on the cutting edge. They have to be more aggressive to maintain their revenue projections." At the same time, Westfall predicted success for the LRE product line, largely due to a lack of competition.
Cisco is targeting a $400-per-port price tag. The switch will cost $3,295 for 12 ports, or $6,495 for 24 ports; the CPE device will sell for $280; the POTS splitter will cost $1,395; and the BBSM software manager is tentatively priced at $9,500 for a 100-seat license.